8.8C - Negatives of Economic Development
Some economic development, both by superpowers and TNCs, has very serious impacts on the environment in which minority groups live and disregards their human rights to their land or culture.
Like development aid, economic development can improve human rights and welfare. If businesses grow, they provide jobs and incomes and people's lives improve. The reduction in poverty in China from 88% of people in 1981 to 5% in 2018 was largely driven by job creation in cities, fuelled by FDI in Chinese industry.
However, in low-income, developing countries, economic development is often focused on the primary economic sector (farming, mining, forestry and fishing - involves obtaining raw materials). A number of players can undertake this, including:
- TNCs from developing countries, including oil and gas companies such as Shell and ExxonMobil
- Government-owned companies (state-run enterprises) and agencies of developing countries.
- Sovereign wealth funds from developed and emerging countries.
- SWFs are government-owned investment funds. They invest national wealth in economic development projects, often overseas.
While activities such as drilling for oil, forestry and commercial farming can generate economic development, they often involve:
- Pollution, such as oil drilling spills and polluted waste water from mining
- Deforestation from forestry and to make new farmland
- Disregard for the land rights of local and indigenous people.
This situation is made worse by the lack of environmental laws and monitoring, lack of clear land title (legal land ownership/tenure. Generally a legal document, but indigenous people often lack this) and corruption which allows illegal and damaging activities to continue unchecked in some developing countries.
Oil exploitation in the Niger Delta
- Oil exports represent about 25% of Nigeria's GDP
- Oil drilling by foreign TNCs in the Niger Delta region has generated conflict with the indigenous Ogoni people over land rights
- Bombings, kidnappings, shootings and mass protests have plagued the region for decades
- Thousand of oil spills, possibly of over 9 million barrels of oil since the 1950s, have caused widespread damage to forests, swamps and human health
Land grabs in West Africa
- These involve foreign TNCs and SWCs buying up farmland in developing countries
- This land is used for cash crops such as coffee or palm oil
- Subsistence farmers are evicted or paid compensation to leave
- The ability of local people to feed themselves through farming is reduced
- In Senegal, about 12% of arable land is under foreign ownership
- However, about 20% of Senegal's population is under-nourished.